Question

What amount is to be repaid on a loan of RS. 12000 for $1\frac{1}{2}$ year at 10% per annum if interest is compounded half yearly.

• A. $13500$
• B. $9734.75$
• C. $13891.5$
• D. $5837.25$

Answer 1

The correct option is C $13891.5$

P $=12000$ per month , T $=1\frac{1}{2}=1.5$ , R $=10\%$

For interest compounded half-yearly,

Amount$=P{(1+\frac{R}{200})}^{2T}$

$=12000{(1+\frac{10}{200})}^{2\times 1.5}$

$=12000{\left(\frac{21}{20}\right)}^3$

$=13891.5$

$\therefore$ the amount is Rs $13891.5$